India’s new draft National Electricity Plan for the two five year periods to 2027 unambiguously concludes that beyond the half-built plants already under construction, India does not require any new coal-fired power stations.

India is accelerating an already rapid diversification away from coal-fired power generation. Energy Minister Piyush Goyal’s strategy is to cut pollution and drive down costs for the consumer, while fully accommodating sustained, strong Indian economic growth.

India’s Intended Nationally Determined Contribution (INDC) released in September 2015 and submitted for the Paris COP21 Climate Agreement aimed to achieve about 40% cumulative electric power installed capacity from non-fossil fuel based energy resources by 2030.

The new draft National Electricity Plan calls for 57% of India’s total electricity capacity to come from non-fossil fuels (372GW of the 650GW total) by 2027, indicating a 42% uplift three years ahead of a schedule set only 12 months ago.

The 50GW of coal power currently under construction is already largely stranded, with the Central Electricity Authority (CEA) modeling showing none of these plants are required before 2022 and only possibly before 2027. 11GW of end-of-life thermal power plants will also close.

The 50GW of coal power under construction will barely operate at 50% capacity, according to the new plan. These stranded assets are only moving forward as the government has opted to retain them as reserve capacity rather than write them off now.

The shift from fossil fuels is largely driven by the transition to renewable energy, in particular solar, the cost of which has dropped 80% since 2011. With installed solar already cheaper than imported coal, last week McKinsey & Co published a paper highlighting that utility solar could reach grid parity against domestic Indian coal-fired power generation by 2019.

India’s new plan models the additional installation of 215GW of renewables (biomass, small hydro, wind plus distributed and utility scale solar) by 2027, balanced by 27GW of hydro, 5GW of new hydro imports from Bhutan, 4GW of gas and 8GW of nuclear capacity.

As such, by 2027 India aims to have 275GW of total renewables, plus 72GW of hydro and 15GW of nuclear (97GW of “other zero emissions” installs) – translating to 372GW of non-fossil fuels, or 57% of the 650GW planned total.

Energy efficiency is modeled to reduce the need for capacity additions by 20GW in each five-year period, with the reduction of transmission and distribution loss from the grid also targeted.

India is moving beyond fossil fuels at a pace scarcely imagined only two years ago. The stark reality is the economics of renewable energy make it irresistible to a growing country aiming to put an end to expensive energy imports.

Tim Buckley is the Director of Energy Finance Studies, Australasia for IEEFA.

There has been a dramatic downwards revision of official future power estimates in India.

In its draft five year power plan the CEA (India’s Central Electricity Authority) confirmed no new coal plants beyond those under construction would be required before 2022, and none would be required in the subsequent plan for the 2022 to 2027 period. A few days earlier India’s Minister for Health informed parliament a World Bank report had estimated air pollution was so bad it cut 3 per cent from the country’s gross domestic product (GDP).

India’s dramatic retreat from new coal in the years ahead owes much to the huge falls in the cost of renewables, slowing electricity demand growth and the gains from a range of energy efficiency measures. Pushed by growing public opposition to air pollution, displacement and deforestation for coal mining, India’s electricity planners and government are dramatically shifting ground.

Coal plant utilisation rates continue to fall year on year, and are hovering below 60% for the April-October 2016 period.

Over the same period the combined generation of wind and solar grew by over 43 per cent compared to the year before, massively outpacing the growth rate for thermal power.

This week the CEA revealed in its draft National Electricity Plan (NEP) that for the five years to 2022 the country does not require any more coal-based capacity addition till 2022 above current levels. This in effect confirms a July analysis by CoalSwarm that the country was facing a coal overcapacity crisis, and a Greenpeace analysis from October that showed that over 90% of the plants currently under construction will remain unutilised by 2022, even at official electricity demand and GDP growth rates.

The draft NEP is clear that there is no need for a single additional MW of coal power till 2022. Moreover, considering the over 50,000 MW currently under construction, likely to come on stream in the next few years, there is also no need for additional coal power plants till 2027. This in effect signals that there is no need for a single new coal power plant to be approved, receive finance, be granted permits or break ground in India for the foreseeable future – if ever!

If the draft plan is adopted, it effectively signals the end of the line for new coal plants in India.

Solar tariffs are already on par with those expected from new coal plants. If the fall in the costs of solar and wind continues, and there is no reason to believe they won’t, it is hard to see a financial basis for any sort of a revival for coal. Since 2011, for instance, the price of installed solar has plummeted by 80 percent,

Lower utilisation rates have contributed to the build-up of large stockpiles of coal at pitheads and power plants – over 58 million tonnes. While thermal coal imports have risen marginally so far this year, on data to September, a big fall is projected in the next few years, with pressure on generators to switch to domestic coal to reduce import-dependence and foreign exchange outflows. The government has announced it wants to end coal imports within a few years.

Media reports referred to the holy city of Varanasi as having the country’s most toxic air, Allahabad in Uttar Pradesh had no clean air days in 2015 Recent reports estimate that over 500,000 Indians die prematurely each year due to air pollution.

With an urban middle class now waking up to the terrible toll on their health from polluted air, and the realisation that renewables are now cheaper than new coal, the writing on the wall is clear – the Indian coal domino is close to toppling.

Mark Roest 3 years ago

I love the 216 new renewable GW by 2027!

phred01 3 years ago

Where Adani Carmichael coal going to be sent once mining has started? It looks like there is something rotten in the state of Denmark! Like Kodak, Godfrey Hurst, Mitsubishi & Johnson Tiles so on, once they get a govn’t handout they cut & run. In a time when aged pensioners pensions are being squeezed there is 1 billion available to Adani. No money to support Car makers in Australia where huge numbers of workers get the sack but the deficit will not be made up new coal employment. Lets hope we won’t be involved with a war on our soil. We will not have any capacity for manufacturing .

FIFO69 3 years ago

To answer your question, the coal will go to India to supply Adani’s power stations to aid the 180 million Indians to transition from poverty and improve their lives.

The $1b will go into constructing the multi-user rail network which will allow other potential projects in the Gilalie, not into Adani’s pocket for a ‘cut and run’ as you ignorantly put it.

Also note that it is a loan, not a free handout.

Richard 3 years ago

i doubt the economics of the Adani mine. There is too much push back. The barrier reef threat is significant and the international pressure against it is huge.

FIFO69 3 years ago

Lol k

Richard 3 years ago

Clearly you are snorting coal dust. It rots your brain. Do some basic research And don’t rely on coal propaganda

Fossil is cooked going forward. Dead as a Dodo

John Saint-Smith 3 years ago

I can just hear MT’s response “Energy Minister Goyal is entitled to his opinion, but what he doesn’t seem to understand is that renewables are unsafe. Coal pollution is good for humanity, especially expensive Australian coal, stranded in the ground in Central Queensland, just waiting for some fool with a lot of spare taxpayer’s dollars to build a mine, and a railway line to the world’s biggest coal port adjacent to the once Great Barrier Reef.”

Alice in Wonderland never had to deal with anything so surreally ridiculous as this LNP House of Cards ! Qld Labor has an even better Mad Hatter twist. They want to install lots of solar and wind to reduce our dependence on coal to help save the planet with one hand, while building the world’s largest and most useless coal mine with the other. Curiouser and curiouser.

John Maynard Keynes once asked “If the facts change, I change my mind. What do you do?” To which Malcontent’s response would be: “Not in the reign of Her Majesty!”

DJR96 3 years ago

What’s most frustrating is that Australia is in a far better position to be able to make the same policy. – No new coal-fired power stations will be needed or will be built. But can we get that officially from government?

Local electricity trading will help to make solar and storage more economical, which India mass uptake will also help with. Microgrids will be important for areas that are not connected to the grid (and probably more economical than connecting them to the grid). Please read, sign and share this petition:

More BS from Tim Buckley, maybe he can get a gig at the Australia Institute?

The graph clearly shows a transition from 200GW to 250GW of coal fired power.

Where will the coal come from to supply the plants?

Option 1: Low quality coal from India and China

Option 2: High quality coal from Australia resulting in reduced emissions, benefit to Australia and minimise global warming and impact to the Great Barrier Reef.

It amazes me that that these left wing BS artists are still up to their old tricks misinforming the Australian public under the misguided belief that they are doing good when in fact they are doing the opposite.

Nice work Tim…

Tim Buckley 3 years ago

You have a view you think is worth hearing, so why don’t you write under your own name? Your point about the amount of coal fired power plants rising by 50GW from 199GW to 249GW is correct – as both the government plan, our article and the chart shows. Where will the coal come from? A question the Energy Minister of India have answered repeatedly. From India. Irrespective of whether you would prefer India to import coal from Australia or not, it is India’s decision, and their energy minister has made it clear. He prefers domestic power generation because it is significantly cheaper for Indians and better for India’s energy security and Indian jobs. Look no further to the trade figures for Nov 2016, coal imports into India down 16% yoy. Putting your head in the hole won’t make the technology transition go away.

FIFO69 3 years ago

Also it is a well documented fact that Indias coal is poorer quality than Australian thermal coal.

Which option would you prefer? Indians to burn 300 million tonnes per year of low quality coal or 300 million tonnes of high quality coal?

You’re not going to ‘save the reef’ by misinforming the public.

Mike Dill 3 years ago

What you missed here is that the running time for all the coal plants in India is going down rather rapidly. Instead of running 90+% of the time, they are already down in the 60% range, and that will decrease even further as cheap RE undercuts the wholesale prices. By 2020 those coal plants will be running even less, and there will be a larger glut of coal in India from local production.

FIFO69 3 years ago

India has 180 million people in poverty. That is 180 million people that will transfer to first world and will want infrastructure, cars and electricity.

I think its great that renewables will take the lions share of that new generation but the data shows an increase in coal fired power generation as well as renewables are unreliable (currently) and coal and gas is require for baseload generation.

There is an opportunity for high quality Australian coal to play a part in this transition. If we can get high quality Australian coal to displace low quality coal from India or Indonesia isn’t that a good thing?

The frustrating thing is that local green activists don’t see this point. They just think coal = bad, not in my back yard. Case in point Tim Buckley…

Tim Buckley 3 years ago

FIF69 – you ask a question about which coal do I want the Indians to use, to the extent they use any. Wrong person to ask. In a market, we get to choose which coal we hope to sell, high quality coal from existing Australian mines, or low quality coal from the proposed Carmichael mine. The more thermal coal we supply, the lower the price, the lower the wages for our mining colleagues, and the lower the value to Australia overall – more supply means lower prices. Rule #1 in economics 101. Rule #2 is that the customer is always right. India is the customer, so they not us choose what coal they want to buy. India’s energy minister sets the rules for this buying, and he has clearly set rules to ensure India uses lower quality Indian coal. Why? Economics and jobs. India wants the local jobs and investment in India, and they can supply coal at half the price of higher quality Australian coal. Energy security and economics will drive India to increase domestic coal, domestic hydro, domestic nuclear and domestic renewables, plus energy efficiency, all of which will work to squeeze out high cost thermal coal imports. We flood the market with more thermal coal seaborne supply, that means lower wages for Australian coal miners and lower royalties for our state government.

FIFO69 3 years ago

Thanks Tim. Are you suggesting Adani are a bunch of fools and are willing to spend $21 billion dollars on a coal project with no idea about the market in their own country? If there is no financial basis for the project then why do you think they are trying to develop it?

There is no doubt in my mind that Adani have agreements established in India with the energy minister to secure market for their product (including in their own powerstations no less) on the proviso that they secure approvals and funding for the project and have done a significant amount detailed financial modelling to justify the equally massive up front capital expenditure.

No one jumps into a $21 billion dollar project without doing a bit of homework mate.

Lets just cut to the chase here. You are selectively using data to create the illusion that global thermal coal use is in a steep structural decline and misinform the Australian public there will be ‘standard assets’ up and down the east coast to the detriment of the Australia to push your own left wing ideological anti-coal agenda.

Once Adani builds this rail line that will open up the Galilee Basin which is why every left wing activist group is jumping on the anti Adani train.

The simple reality is that India, China and the rest of Asia need coal to advance their economies.

What happens if you shut down the Carmichael project? That coal demand will be met locally or from Indonesia. Low quality coal creating greater CO2 emissions than high quality Australian coal.

Lets all thank GetUp!, Lock the Gate and Tim Buckley for killing Australian jobs and killing the reef at the same time…

Mike Shackleton 3 years ago

Adani are most definitely not a bunch of fools. But they are treating the current Australian leadership as fools.

The only way the Galilee rail line is economically viable is if all the projects proposed in that area, in addition to the Carmichael project are developed. Flooding the global market for a resource in decline will drive the mines out of business.

Adani’s business structure is so convoluted and opaque, owned through companies set up in tax havens overseas they know they’ll make a stack of cash just getting the mine up and running. If the enterprise collapses, they will walk away from it and nobody will be able to bring the hammer down on them and the government will be left to foot the cleanup cost. These were the findings from a recent ABC report:

You blindly talk about India’s increased coal capacity but blatantly ignore the statements that although the capacity is expected to increase, the equipment will almost all be mothballed and put on care and maintenance. Capacity is one thing, utilisation is another. Coal plants don’t stack up unless they are running full tilt outside of programmed maintenance.

The rate at which renewables prices are dropping it would be madness to invest in an asset that requires 70 years of operation. Especially when it’s clear that it has a limited future.

FIFO69 3 years ago

1. Not sure where you get the information that “The only way the Galilee rail line is economically viable is if all the projects proposed in that area, in addition to the Carmichael project are developed”. Have seen the Carmichael definitive feasibility study?

2. I wouldn’t trust anything written to Stephen Long at ABC. That story is a beat up aimed at discrediting Adani. Look at BHP and Rio’s corporate structures with marketing hubs in Singapore aimed at avoiding Australian tax. Why is Adani suddenly headline news?

3. In regards to you comment “You blindly talk about India’s increased coal capacity”, I am just quoting from the new draft National Electricity Plan that shows that demand from India for coal will increase significantly (Section 9.3 page 9.11) it shows that demand for coal is projected to continue to ramp up in India to 677Mtpa in FY2122 and then up to 900Mtpa in FY2627. That is a lot, Australias total exports is about 400Mtpa. There is a clear demand for coal in India. We could literally double our coal exports over the next 10 years to meet this demand.

4. In regards to you comment “The rate at which renewables prices are dropping it would be madness to invest in an asset that requires 70 years of operation”. Cost isn’t the only issue. Reliability and baseload generation is a large consideration. I am happy to pay a little more for my electricity if it means I can get electricity 24/7. Until the technology is developed that allows renewables to provide baseload generation its not going to replace coal and gas. Simple as that.

Maybe stop making assumptions based on your ideologicaly, you have been reading too much tim buckley propaganda.

jeffhre 3 years ago

The coal to support the 50 GW of plants under construction will be easy to supply. It will show up in a simple accounting of the lower capacity factors of India’s existing coal plants. In other words as the capacity factors of India’s existing coal fleets fall, the coal for the new plants will be diverted from the old plants.

“11GW of end-of-life thermal power plants will also close.” And “Energy Minister Goyal” hopes to utilize “the build-up of large stockpiles of coal at pitheads and power plants – over 58 million tonnes” over imports.

FIFO69 3 years ago

58Mt stockpile won’t last forever mate. Carmichael mine will produce that year on year for the next 90 years to meet India’s demand for high quality low emission coal.

jeffhre 3 years ago

I’m fearful that many in the hierarchy are not interested in using low emission fuel. Although momentum is building to further develop India’s solar and wind industries.

Richard 3 years ago

I agree that it’s better to burn our coal than dirty coal. So Australian exports may even grow In the next ten years. Then the accelerating coal plant closures will kill the global coal industry between 10-20 years out. Australia will hang on as a an exporter of coal like Saudi Arabia with oil as the cheapest producers until the end But it will be all over red rover for fossil in general by 2040-45.

FIFO69 3 years ago

OK so you agree that the Adani coal project is good for Australia, good for Australian jobs and good for the Great Barrier Reef.

Richard 3 years ago

No, I don’t think it is. The Adani mine is a bad idea. Personally I don’t like coal but the reality is it is still going to be burnt for some time. We should try and burn the cleanest coal where possible while we transition. It’s common sense.

FIFO69 3 years ago

Mate, put down the bong, think for yourself. Australia’s coal is better than Indonesia’s, china’s and India’s coal. If Australia’s coal is burnt and it offsets coal from other countries, that’s a good thing, despite the additional co2 footprint of shipping. Your stupidity is literally a gift to Tim Buckley IEEFA, greenpeace, 369.org, lock the gate and every other ideological green nimby anti Australian group bombarding the media with misinformation.

Richard 3 years ago

Haven’t smoked a bong in more than two decades. You are obviously on the hard stuff. How’s your nostrils? Is your brain fried yet? Look, do you think this thing would get up without a F’kn 1 billion dollar tax payer subsidy? Coal is F’ked get off your drugs

FIFO69 3 years ago

Are you suggesting that a 21 billion dollar project is reliant on a 1 billion dollar loan from the government? Adani has has that the project will proceed with or without the loan.

Richard 3 years ago

Let’s see if it actually goes ahead. I doubt it.

FIFO69 3 years ago

Riteo mate, its in my calendar, I will repost 22/1/2018 and report on production totals…

FIFO69 3 years ago

The draft National Electricity Plan document states that for the FY1617 period a total of 48Mt of imported coal will be required for plants designed for imported coal.

Section 9.2.1.2 also states that there may be a requirement for additional imported coal in FY1617 for blending and due to domestic railway constraints.

Additionally, for the period from 2021 through to 2027, imported coal is predicted to remain at 50Mtpa.

The Carmichael project will produce 60Mtpa at nameplate capacity. Note that approval is sought for 60Mtpa but it is not obligated to produce this capacity and may ramp up or down based on market demand.

Assuming 50Mtpa goes to India to supply Adani’s current powerstations (totalling 10,440MW of combined capacity) and potentially the 16,500 MW of capacity that Adani has under implementation and planning stage then that only leave 10Mtpa of coal to export elsewhere.

Given that global coal demand is projected to increase by 15% through 2040 the Carmichael project should be a safe bet as they will have competitive advantages as they can build efficiencies into the project. Adani will own the supply chain from mine to powerstation and will get the coal at wholesale prices. The Adani owned Udupi and Mundra powerstations are also on the coast meaning minimal overland transport costs once off the ship.

Richard 3 years ago

Wrong. Global coal demand will fall off a cliff in 10-20 years. Swept away by the far cheaper clean tech invasion. Even blind Freddy can see that. Why do you think they are not approving any more coal plants in India. and China, instead they are closing or lying idle in some cases. Certainly in the developed world coal is as dead as a dodo within 20 years.